There’s no doubt that litigation is expensive. When the added expense of producing and reviewing electronically stored information (ESI) is added, the costs can become mind boggling.
Case in point – In the highly publicized Apple Inc. v. Samsung Electronics Co. series of lawsuits over smartphone patent infringements, Samsung was required to produce 11.1 million documents. Of these, 880,000 were eventually delivered to Apple. The total cost paid to eDiscovery vendor UBIC, according to Samsung attorney Michael Fazio, was $13.1 million.
During litigation, it’s generally assumed that the costs of eDiscovery will be borne by the responding party. That is to say, the burden of searching through potentially vast volumes of data to find the responsive documents falls solely on the shoulders of the party that owns the data – not the party making the information request. This unfortunately opens the possibility of a grave, unintended consequence. Litigants may be encouraged to adopt a strategy of requesting excessive data in order to force the opposing party to settle rather than bear the greater expense of the discovery process.
There is some recourse, however. Rule 26 of the Federal Rules of Civil Procedure can, in some cases, be used to divide the burden of eDiscovery more evenly by shifting some portion of the expense to the requesting party. In order to do this, the responding party needs to show that the information request is “unduly burdensome and expensive.” Even if the requesting party can show there is sufficient cause for the information request, the court may shift some portion of the collection expense based on a number of factors, which includes the cost of production relative to the resources of the affected parties and the proportional incentive for each of the parties to control costs.
While Rule 26 provides some protection from excessively burdensome or expensive information requests, it doesn’t guarantee the court will agree to every request for the redistribution of inequitable eDiscovery costs. Moreover, this rule is applied on a case-by-case basis. As a matter of course, organizations can more effectively mitigate the costs of eDiscovery by adopting and adhering to a broad and consistent information governance strategy prior to any litigation.
Relatively easy techniques to keep eDiscovery cost manageable include:
- Bring document analysis, evidence collection, and legal hold tools in-house as part of a broader information governance strategy. Know where your data is and who owns it.
- Utilize in-house resources for the collection and review of electronically stored information, rather than rely on outside (and expensive) forensics/IT consultants or law firms.
- Have a routine, structured plan for contending with information requests. Don’t start the process from scratch every time. Use culling and deduplication to remove excessive or redundant data on a regular basis rather than by a case-by-case transaction.
- Document retention policies are your friend. Keeping documents beyond their normal business lifespan is ineffective from a storage standpoint and dangerous from a legal perspective. Routinely expunging data past its shelf-life isn’t about hiding the evidence; it’s simply paving the way for reducing the cost of having to produce and manually review outdated information down the road.
- Work with your Legal team as they negotiate with opposing counsel over what keywords will be searched. According to a study by the Rand Corporation, 73 percent of the cost of eDiscovery is the document review process. Other sources place it as high as 80 percent. Agreeing to vague or esoteric search terms may turn up reams of superfluous data, all of which will need to be reviewed.
What does the future hold? Also cited in the Rand piece is a technique known as Predictive Coding, which may offer some relief by reducing the number of non-responsive documents. According to the study, “Computer-categorized document review techniques… identify at least as many documents of interest as traditional eyes-on review with about the same level of inconsistency, but with the potential of reducing the hours attorneys must spend by about three-quarters.” However, it remains unclear whether such automated practices will be deemed defensible and therefore acceptable to the courts.
Until such time as Predictive Coding or some other method becomes commonly accepted practice, reducing exorbitant eDiscovery costs is best managed through intelligent information governance strategies. Or simply put, by understanding what data you have and knowing what data you actually need versus what serves as a potential liability.
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